by Bryce Edwards

21 May 2007

Responses to Budget: from left to right

Responses to the Labour Government’s 2007 Budget mostly fall into a left-right continuum – with critics voicing leftwing or pro-poor concerns, while its supporters use rightwing or pro-business arguments in its favour. Essentially, the left critics are Laila Harre, Matt McCarten, Susan St John, and Chris Trotter. The Budget supporters aren’t necessary all rightwing, but Jim Anderton, the CTU, EPMU,Jordan Carter, the NZ Institute, and Colin James have used rightwing, pro-business or economically-orthodox arguments in its support . [Read more detail below]

Laila Harre’s response is entitled Workers party fails to help the poor. She argues that the Budget continues with the prevailing economic orthodoxy of past governments – especially with regard to low expenditure: ‘When before has the workers' party been so endowed with riches and surrounded by such potential?’ Thus, Harre says, ‘this Budget makes me sad’.

Chris Trotter’s response isn’t anything too special, but at least he’s back to seeing Labour for what it is: a continuation of Rogernomics and neo-liberalism. Trotter suggests that despite their intentions, Labour MPs are playing a role to ‘increase the misery of New Zealand's poorest families’.

Beyond these clear left critics, are some rather more ambiguous voices. The Greens’ criticism is strikingly not about economics, inequality, neo-liberalism, or any other traditional leftwing concerns, but only about the Budget’s failure to deliver much for reductions of emissions. Their criticism are fairly lame: ‘This Budget will make us just a teensy-weensy bit more sustainable in a few years, with carbon emissions growing only slightly slower than they are now.’ They are calling the Budget a ‘greenwash’, which indicates that the Greens have little understanding of the term – as the Budget was not sold as an environmental one. In their response to the Budget, the Greens have shown that they are increasingly a single-issue party with limited interest in wider social and economic issues.

The health sector has been relatively strong in their criticism of what they say is a disappointing budget. For example, the New Zealand Medical Association’s media release, Health Given Low Priority In Budget, says ‘Health seems not to have been a major priority for the Government in this year’s Budget’. The Access To Medicines Coalition, says Budget disappointing for medicines access. They say that the Budget for community-based pharmaceuticals is but ‘a drop in the bucket’ and doesn’t address the significant issues the New Zealand public has in accessing medicines. ATM says New Zealand has been falling behind other OECD countries in terms of timely access to medicines for some time, and that the Budget increase of ‘amounts to less than 1% of Pharmac’s total budget for community pharmaceuticals.’

The Family First Lobby have argued that the Budget Offers No Assistance to Family Budget – it has ‘offered no relief to families in their ongoing battle to meet their weekly bills and one-off major costs such as car repairs and children’s uniform costs’ and they’re critical of Working for Families for not being more helpful.

On the right of politics, there have been the usual voices of opposition. On Kiwiblog David Farrar hasn’t been able to quite decide if he liked the Budget or not. On the one his summary of the Budget is entitled Why this is an extremist Government, but then in the post he says ‘this budget is probably one of Labour's better ones’. Elsewhere he also says that KiwiSaver is ‘the biggest privatisations in our history. And I applaud this.’

Also applauding the Budget because it is pro-business is Jim Anderton and the Progressive Party. And the EPMU say they welcome the Budget, especially because of the corporate tax cut.

The CTU has also put out a number of strong statements of support – see: Making the Kiwi Fly and Union support for Kiwisaver overwhelming. Strangely enough, CTU president Ross Wilson specifically mentions that ‘Union support for Kiwisaver is overwhelming despite some high profile media comment suggesting otherwise’ – probably in reference to the dissenting lines of union leaders Matt McCarten and Laila Harre.

Also ostensibly ‘on the left’, but really ‘on the right’, Labour’s Jordan Carter’s Just Left blog defends the Budget on the basis that it is fiscally conservative. In a honest and useful post, Carter rhetorically asks if the Budget is profligate, and replied ‘not even remotely. He correctly points out that government expenditure as a proportion of GDP remains low.

Some of the business responses have managed to see the benefits for them in Labour’s Budget. One business representative says ‘Today's Budget is an honest attempt to fix NZ's long term economy, but lacking a sense of urgency. I see lots of positives in the Budget for long term macro settings to lift productivity and growth.’

Most are generally supportive of KiwiSaver – if not the employer contribution element. For example, David Skilling (chief executive of the New Zealand Institute) says: ‘Increased savings will also strengthen the business environment. Over time, increased personal savings will strengthen the capital markets and provide a much larger domestic pool of capital to finance company growth. Goldman Sachs JB Were estimates the expanded KiwiSaver scheme will generate increased funds flow of between about $5 billion and $7 billion a year by 2013.’

Finally, Colin James thinks the Budget refutes the myth that Cullen is a ‘business-unfriendly Finance Minister’. He says that even Labour’s social spending on Working for Families etc actually ‘deliver a more settled society and that more money can be made in such a society than a dislocated one’ – and so business should be happy.

TrackBack

Comments

Responses to Budget: from left to right

Responses to the Labour Government’s 2007 Budget mostly fall into a left-right continuum – with critics voicing leftwing or pro-poor concerns, while its supporters use rightwing or pro-business arguments in its favour. Essentially, the left critics are Laila Harre, Matt McCarten, Susan St John, and Chris Trotter. The Budget supporters aren’t necessary all rightwing, but Jim Anderton, the CTU, EPMU,Jordan Carter, the NZ Institute, and Colin James have used rightwing, pro-business or economically-orthodox arguments in its support . [Read more detail below]